Codes of Conduct or in another word codes of behavior are intended to clarify an organizations mission, values and principles and to guide behavior within an organization. The aim is to prevent inappropriate behavior e.g. conflict of interest, self-dealing or bribery.[1] A code works as a helping tool for employees how to deal with ethical dilemmas, prejudices and gray areas that are faced in everyday work. As Hoffman and Driscoll defines a well-written and thoughtful code: "it reflects the covenant than an organization has made to uphold its most important values, dealing with such matters as its commitment to employees, its standards for doing business and its relationship with the community." [2]
History
In the 1990s it became more common for corporations to implement their own codes of conducts because of an increased emphasis on corporate responsibility. These emerged after a period that saw a major shift in the economic role of the state, and in policies toward transnational corporations and foreign direct investment. Codes of conduct have developed from voluntary vague declarations to international operations that tend to focus on two main areas: social conditions and the environment. Stakeholders, as international trade union organizations, development and environmental NGOs and the corporate sector itself have had a significant role in the expansion of codes of conduct for international business.
Importance
There have been several changes in the global economy during the last decades. It is no longer only aspects as quality or delivery dates that matters, also working conditions and environmental impacts have become more important.[3] Because of the significance of the CSR practices to companies’ business performance and reputation, corporations have tried to manage not only their own CSR practices but also those of their supply chains by imposing codes of conduct to maintain their sustainability in the global market.
Codes of Conduct and corruption
A strategy for companies to reduce both direct and indirect costs of corruption is to implement anti-bribery codes, companies develop strict codes and principles that guide their policies on corruption round the world. This is an example from Shell's General Business Principles regarding bribes and corruption: "The direct or indirect offer, payment, soliciting, and acceptance of bribes in any form are unacceptable practices". [4] Nowadays more companies are engaged in international business and because of that international bribery is an ethical issue of much concern. The importance of this can be seen in the langue from the preamble of the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in international Business Transactions.[5] Despite the fact that international bribery has been made a criminal offense in countries that represents a majority of world trade, evidences like Transparency International's Corruption Index indicates that bribery is still a severe problem. The handbook Anti-Corruption Ethics and Compliance handbook for Business made by OECD, UNODC and The World Bank was made to serve as a helping tool for companies wanting to fight corruption. A request that is made in the handbook is that enterprises should always prohibit bribery in any form, whether it's indirect or direct. They should also commit to implement a programme to counter bribery and it should contain the enterprise's anti-bribery efforts as code of conduct, risk management, internal and external communication, internal control and training and guidance. [6]
Critique
Although codes of conduct are appreciated from a stakeholder perspective they are also criticized because of high costs for consumers and other stakeholders. Codes of conducts are also critcized for being time-consuming for example managers must host visits for compliance auditors. [7] Another question that has been questioned is how it is possible to control if the company have been able to adopt their codes of conduct or not or is it just a public relations exercise rather than a genuine attempt to improve conditions and performance. The development of codes of conduct tend to undermine the position of traditional trade union organizations which is an issue and it is important to develop strategies to ensure that codes are complementary to government legislation. [8]
Codes of Conduct in the pharmaceutical industry
Corruption is a pervasive problem affecting the health sector and the main reason for this is the amount of money that is involved in the pharmaceutical industry, especially in the least developed countries where medicines are the second largest household expenditure, after food. Little research has been done regarding corruption in health sector but codes of conduct, professional education programmes and information campaigns are used to reduce corruption in the pharamceutical industry. [9] Fimea is the Finnish Medicine Agency that is in charge of controlling the marketing of pharmaceuticals in Finland. The marketing is also controlled by the voluntary self-regulation of the pharmaceutical industry and the self-regulation is based on Pharma Industry Finland's (PIF) Code of Ethics which is a detailed set on forms on the pharmaceutical marketing and information both directed to consumers and healthcare professionals. The PIF code of ethics is jointly adopted by the pharmaceutical companies. The PIF Code of ethics highlights the the shared will to act ethically, sustainably and responsibly [10]
Gilman, PhD, Stuart C. Ethic codes and codes of conduct as tools for promoting an ethical and professional public service:
Comparative Successes and Lessons (2005): 16
^ Driscroll, Dawn-Marie & Hoffman, W, Michael. Ethics Matters, How to implement Values-Driven Management. (2000): 77
Rhys, Jenkins. United Nations Research Institute for Social Development, Corporate Codes of Conduct, Self regulation in a Global Economy. Technology, Business and Society Programme Paper Number 2 (2001)
McKinney, A. Joseph & Moore, W. Carlos. Journal of Business Ethics, International Bribery: Does a Written Code of Ethics Make a Difference in Perception of Business Professionals. (2008): 105
^ OECD, UNODC & World Bank. Anti-Corruption Ethics and Compliance Handbook for Business. 2013
Chatterji, Aaron & Levine, David. Breaking Down the Wall of Codes. Evaluating Non-Financial Permormance Measurment. Haas School of Business(2005)
^ Rhys, Jenkins. United Nations Research Institute fro Social Development, Corporate Codes of Conduct Self Regulations in a Global Economy.
Technology, Business and Society Programme Paper Number 2 (2001)
Definition
Table of Contents
History
In the 1990s it became more common for corporations to implement their own codes of conducts because of an increased emphasis on corporate responsibility. These emerged after a period that saw a major shift in the economic role of the state, and in policies toward transnational corporations and foreign direct investment. Codes of conduct have developed from voluntary vague declarations to international operations that tend to focus on two main areas: social conditions and the environment. Stakeholders, as international trade union organizations, development and environmental NGOs and the corporate sector itself have had a significant role in the expansion of codes of conduct for international business.Importance
There have been several changes in the global economy during the last decades. It is no longer only aspects as quality or delivery dates that matters, also working conditions and environmental impacts have become more important.[3] Because of the significance of the CSR practices to companies’ business performance and reputation, corporations have tried to manage not only their own CSR practices but also those of their supply chains by imposing codes of conduct to maintain their sustainability inthe global market.
Codes of Conduct and corruption
A strategy for companies to reduce both direct and indirect costs of corruption is to implement anti-bribery codes, companies develop strict codes and principles that guide their policies on corruption round the world. This is an example from Shell's General Business Principles regarding bribes and corruption: "The direct or indirect offer, payment, soliciting, and acceptance of bribes in any form are unacceptable practices". [4]Nowadays more companies are engaged in international business and because of that international bribery is an ethical issue of much concern. The importance of this can be seen in the langue from the preamble of the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in international Business Transactions.[5] Despite the fact that international bribery has been made a criminal offense in countries that represents a majority of world trade, evidences like Transparency International's Corruption Index indicates that bribery is still a severe problem. The handbook Anti-Corruption Ethics and Compliance handbook for Business made by OECD, UNODC and The World Bank was made to serve as a helping tool for companies wanting to fight corruption. A request that is made in the handbook is that enterprises should always prohibit bribery in any form, whether it's indirect or direct. They should also commit to implement a programme to counter bribery and it should contain the enterprise's anti-bribery efforts as code of conduct, risk management, internal and external communication, internal control and training and guidance. [6]
Critique
Although codes of conduct are appreciated from a stakeholder perspective they are also criticized because of high costs for consumers and other stakeholders. Codes of conducts are also critcized for being time-consuming for example managers must host visits for compliance auditors. [7] Another question that has been questioned is how it is possible to control if the company have been able to adopt their codes of conduct or not or is it just a public relations exercise rather than a genuine attempt to improve conditions and performance. The development of codes of conduct tend to undermine the position of traditional trade union organizations which is an issue and it is important to develop strategies to ensure that codes are complementary to government legislation. [8]Codes of Conduct in the pharmaceutical industry
Corruption is a pervasive problem affecting the health sector and the main reason for this is the amount of money that is involved in the pharmaceutical industry, especially in the least developed countries where medicines are the second largest household expenditure, after food. Little research has been done regarding corruption in health sector but codes of conduct, professional education programmes and information campaigns are used to reduce corruption in the pharamceutical industry. [9]Fimea is the Finnish Medicine Agency that is in charge of controlling the marketing of pharmaceuticals in Finland. The marketing is also controlled by the voluntary self-regulation of the pharmaceutical industry and the self-regulation is based on Pharma Industry Finland's (PIF) Code of Ethics which is a detailed set on forms on the pharmaceutical marketing and information both directed to consumers and healthcare professionals. The PIF code of ethics is jointly adopted by the pharmaceutical companies. The PIF Code of ethics highlights the the shared will to act ethically, sustainably and responsibly [10]
Examples of Codes of Conduct
Apple-Supplier Code of ConductCoca-Cola Code of Conduct
Pfizer-Code of Conduct
H&M- Code of Conduct
Transparency International-Code of Conduct
Gilman, PhD, Stuart C. Ethic codes and codes of conduct as tools for promoting an ethical and professional public service:
Comparative Successes and Lessons (2005): 16
Rhys, Jenkins. United Nations Research Institute for Social Development, Corporate Codes of Conduct, Self regulation in a Global Economy. Technology, Business and Society Programme Paper Number 2 (2001)
Doh, P. Jonathan. Rodriquez, Peter. Uhlenbruck, Klaus. Collins, Jamie & Eden, Lorraine. Coping with Corruption in Foreign Markets. Academy of Management Executive, 2003. Vol 17, No. 3
McKinney, A. Joseph & Moore, W. Carlos. Journal of Business Ethics, International Bribery: Does a Written Code of Ethics Make a Difference in Perception of Business Professionals. (2008): 105
Chatterji, Aaron & Levine, David. Breaking Down the Wall of Codes. Evaluating Non-Financial Permormance Measurment. Haas School of Business(2005)
Technology, Business and Society Programme Paper Number 2 (2001)
Miller, E. Jennifer. PhDc & English, William. PhD. Corruption.
Pharma Industry FInland, Pharma industry Finland Code of Ethics. (2013)